A 4-cent gas tax hike is short money
In the end, investing in better roads and bridges will offer a very high return
Roads and bridges are the lifeblood of New Hampshire’s economy. Businesses large and small not only benefit, but depend on a well-functioning network of roads and bridges, allowing the movement of not just goods and services, but also of the employees who produce these goods and perform these services.
But this network is falling apart before our eyes. The number of red-list bridges and highway miles rated in poor condition continues to grow faster than our ability to pay to repair them.
Also troubling is our elected leaders’ inability to find a sustainable funding solution to ensure that our state’s surface transportation needs are adequately met now and in the future.
That’s why the Greater Manchester Chamber of Commerce is pleased to see real leadership on this issue from state Sen. Jim Rausch, prime sponsor of Senate Bill 367, which would provide for the first increase in the road toll (often referred to as the gas “tax”) since 1991 by tying the road toll rate to the Consumer Price Index.
This is estimated to result in a 4.2-cent increase next year and then be readjusted every four years. If recent history is any indication, the road toll would increase about one cent every four years.
It is acknowledged that Senator Rausch’s proposal is only a partial solution, but it is a step in the right direction, and that’s why the Greater Manchester Chamber of Commerce Board of Directors unanimously voted to support SB 367.
The road toll is currently 18 cents per gallon, where it has remained since the last time it was increased 23 years ago. Back then, the average price for a gallon gas was $1.14. This equated to a gas tax rate of just under 16 percent. But with gas hovering at about $3.29 a gallon, the rate is about 5.5 percent.
Coupled with inflation and more fuel-efficient vehicles on the road, not to mention changing driving habits that are resulting in fewer vehicle miles traveled, the state has less and less revenue with which to adequately maintain our roads and bridges. And the money we do have has much less purchasing power than it did in 1991.
Indeed, the price of asphalt increased 460 percent between 1992 and 2012. Increases have also been seen in the prices of gasoline, diesel and road salt, to name but a few.
The New Hampshire Department of Transportation further estimates that roads in need of repair cost each state motorist an average of $330 per vehicle each year. A four-cent increase in the gas tax, by contrast, will see the average motorist paying an extra $16 per vehicle. That’s what we call short money in the business world.
Some are concerned with the prospect of a variable-rate gas tax that adjusts automatically, as is the case in 18 other states and the District of Columbia, believing that lawmakers should have to approve any tax increase. While we would generally agree with this, the Legislature has proven itself, over the course of many sessions, unwilling or unable to find a sustainable solution to adequately funding the maintenance of our roads and bridges.
That said, should Senate Bill 367 pass, lawmakers would have four years to find an alternate solution before the next rate adjustment. Alternately, they have the ability to suspend any future rate increases.
No one likes to pay taxes and fees, and as a business advocacy organization you won’t often hear us advocating for their increase, but in the end, investing in better roads and bridges is short money and an investment that will offer a very high return to residents, businesses, and the state as a whole.
Michael C. Whitney is interim president and CEO of the Greater Manchester Chamber of Commerce.